Touch technique (or two-handed tapping) is a way of playing guitar. There are two distinct definitions of touch technique. First refers to playing with no distortion, using a piano-like attitude: left hand plays background (walking bass lines, chords), and right plays melody, improvisation etc. This is what Stanley Jordan and players, that use Stick or Warr guitars (special guitars designed for touch technique) do.
Second description means playing with distortion, like Eddie Van Halen, but using more that one finger of right hand. This way you can't play piano tunes. It's more like special effect in your solos. I don't prefer this kind of tapping.
I've been playing touch technique since 1995. It's not easy to master. It requires a deep knowledge of harmony, music theory, etc. Most tap-guitar masters play jazz. This is not technique for players, who can't read music notation.
My first instrument was an accordion. Now I'm able to play on guitar the same tunes, I used to play on accordion. For example: Bach preludes. They sound good played with touch technique along with the trio band (bass and drums). They provide harmonic background even when you play solos.
There are many variations of touch technique. Some people play special guitars (Stick, Warr). Some of those guitars look like 6 string guitar and bass together (10 string). Others look like two 6 string guitars. Well I can't afford this special guitar (it's about 4000 $ and my annual salary is about 1800$ in Poland), but it's possible to play many tunes on standard 6-string guitar.
There is a lot of stuff about tapping history. You can find very interesting article "The History of Touch-Style" written by Traktor Topaz at Touch-Style Territory, or at Mobius Megatar. Also there is an article about first special guitars for touch technique at Dave Bunker's official site (he has made the first one), and article about history of Chapman Stick - a most popular tap instrument. We have also MP3 files of father of two-handed tapping at http://www.geocities.com/websterfiles.
You may find more about touch technique on Stanley Jordan's official site.